HOURLY COMPENSATION COSTS FOR ALL EMPLOYEES IN MANUFACTURING 32 COUNTRIES OR AREAS 22 MANUFACTURING INDUSTRIES, 1996-2006 General Notes: The measures for total manufacturing were published in news release USDL 08-0093, "International Comparisons of Hourly Compensation Costs in Manufacturing, 2006," January 25, 2008. The measures for individual manufacturing industries are less reliable than the total manufacturing data because there are more technical limitations associated with them. For more information about limitations, see the Technical Notes. The measures in these tables are shown according to the North American Industry Classification System (NAICS) for most NAICS 3-digit level industries; selected additional industry combinations and selected 4-digit level industries are shown as well. Hourly compensation costs in national currency for countries that are members of the European Monetary Union (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Netherlands, Portugal, and Spain) are expressed in the national currency used in each country prior to the implementation of the euro for 1996-1998, and in euros for 1999-2006. More information about national currency units and exchange rates used in these tables is on page 6. Notations: .. Data not available. # Break in series. Data are not comparable with data from the previous year. Prepared By: U.S. Department of Labor, Bureau of Labor Statistics, Office of Productivity and Technology, January 9, 2009. Table of Contents PAGE 1 Technical Notes....................................................... 2 Exchange Rates........................................................ 7 Industry Tables: Manufacturing ..................................................... 10 Food, Beverage, and Tobacco Product Manufacturing ................. 12 Textiles and Textile Products Manufacturing ....................... 14 Apparel Manufacturing ............................................. 16 Textiles and Apparel Manufacturing ................................ 18 Leather and Allied Products Manufacturing ......................... 20 Textiles, Apparel and Allied Products Manufacturing ............... 22 Wood Product Manufacturing ........................................ 24 Paper Manufacturing ............................................... 26 Petroleum and Coal Products Manufacturing ......................... 28 Chemical Manufacturing ............................................ 30 Plastics and Rubber Products Manufacturing ........................ 32 Nonmetallic Mineral Product Manufacturing ......................... 34 Primary Metal Manufacturing ....................................... 36 Fabricated Metal Product Manufacturing ............................ 38 Primary and Fabricated Metal Products Manufacturing ............... 40 Machinery Manufacturing ........................................... 42 Computer and Electronic Product Manufacturing ..................... 44 Electrical Equipment, Appliance, and Component Manufacturing ...... 46 Transportation Equipment Manufacturing ............................ 48 Motor Vehicle and Parts Manufacturing ............................. 50 Aerospace Product and Parts Manufacturing ......................... 52 Furniture and Related Product Manufacturing ....................... 54 Technical Notes PAGE 2 Introduction The accompanying tables present international comparisons of hourly compensation costs for all employees in component manufacturing industries in selected countries or areas. The total compensation measures are prepared by the Bureau of Labor Statistics in order to assess international differences in employer labor costs. Comparisons based on the more readily available average earnings statistics published by many countries can be misleading: national definitions of average earnings differ considerably; average earnings do not include all items of labor compensation; and the omitted items of compensation frequently represent a large proportion of total compensation. The compensation measures are computed in national currency units and are converted into U.S. dollars at prevailing commercial market currency exchange rates. The foreign currency exchange rates used in the calculations are the average daily exchange rates for the reference period. They are appropriate measures for comparing levels of employer labor costs. They do not indicate relative living standards of workers or the purchasing power of their income. Prices of goods and services vary greatly among countries, and commercial market exchange rates are not reliable indicators of relative differences in prices. Differences in industrial classifications among countries can limit the comparability of some sub-manufacturing industry level measures. In addition, data at the sub-manufacturing level are subject to greater limitations than at the all manufacturing level: data for some items of compensation may not be available for all years and may be estimated using trends in similar industries or in all manufacturing; data for some industries may be based on small sample sizes and therefore may fluctuate more from year to year than data at the all manufacturing level; and industry-specific events or events at large firms can have a pronounced effect on data for a particular industry. Industrial Classifications The measures in these tables are shown according to the North American Industry Classification System (NAICS) for most NAICS 3-digit level industries; selected additional industry combinations and selected 4-digit industries are shown as well. For each industry, only countries for which data are available are shown. The concordance between NAICS (which is used in the United States, Canada, and Mexico) and the industry classifications used in other countries is only approximate. Because the requisite data are not available, it is not possible to adjust for all the differences between NAICS and other classification systems. The extent to which these differences affect the comparability of the data varies by industry and by country. In general, most of these differences are minor and do not significantly affect the comparisons; where differences may be more important, they are noted on the appropriate industry table. With the exceptions of Japan and Taiwan, most of the economies in this report that do not use NAICS use classification systems that are closely based on the International Standard Industrial Classification of all Economic Activities, Revision 3 (ISIC Rev. 3). In addition, the classification systems used by European Union countries are linked to the European Union’s official classification system (NACE Rev. 1), which is in turn closely linked to ISIC Rev. 3. Because of this, some exceptions in industry classification noted in the tables may apply to several countries, including most European Union countries. In such cases, a general footnote to the table that states "for NACE countries" is included. When the general footnote also applies to some non-European Union countries, those countries are included in the footnote as well. PAGE 3 For the purposes of these tables, "NACE countries" refers to the following countries: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Netherlands, Poland, Portugal, Slovakia, Spain, Sweden, and the United Kingdom. Definitions Hourly compensation costs include (1) hourly direct pay and (2) employer social insurance expenditures and other labor taxes. Hourly direct pay includes all payments made directly to the worker, before payroll deductions of any kind, consisting of pay for time worked and other direct pay. Social insurance expenditures and other labor taxes include employer expenditures for legally required insurance programs, contractual and private benefit plans, and other labor taxes. Other labor taxes refer to taxes on payrolls or employment (or reductions to reflect subsidies), even if they do not finance programs that directly benefit workers, because such taxes are regarded as labor costs. Hourly Compensation Costs consists of: > Hourly Direct Pay >> Pay for Time Worked >>> Basic wages >>> Piece rate >>> Overtime premiums >>> Shift differentials >>> Regular, non-seasonal bonuses and premiums >>> Cost-of-living adjustments >> Other Direct Pay >>> Pay for time not worked (vacations, holidays, and other leave, except sick leave) >>> Seasonal and irregular bonuses >>> Social allowances >>> Pay in kind > Employer Social Insurance Expenditures (both legally required and contractual and private) and Other Labor Taxes >> Retirement and disability pensions >> Health insurance >> Income guarantee insurance and sick leave >> Life and accident insurance >> Occupational injury and illness compensation >> Unemployment insurance >> Family allowances >> Other social insurance expenditures >> Taxes (or subsidies) on payrolls or employment The BLS definition of hourly compensation costs is not the same as the International Labor Office (ILO) definition of total labor costs. BLS hourly compensation costs do not include all items of labor costs. The costs of recruitment, employee training, and plant facilities and services--such as cafeterias and medical clinics--are not included because data are not available for many countries. The labor costs not included account for no more than 2 percent of total labor costs in most countries for which the data are available. All employees include production workers, as defined below, as well as all others employed full or part time in an establishment during a specified payroll period. Persons are considered employed if they receive pay for any part of the specified pay period. Temporary employees are included. The self-employed, unpaid family workers, and workers in private households are excluded. PAGE 4 Production workers generally include those employees who are engaged in fabricating, assembly, and related activities; material handling, warehousing, and shipping; maintenance and repair; janitorial and guard services; auxiliary production (for example, power plants); and other services closely related to the above activities. Working supervisors are generally included; apprentices and other trainees are generally excluded. Methods Total compensation is computed by adjusting each country's average earnings series for items of direct pay not included in earnings and for employer expenditures for legally required insurance, contractual and private benefit plans, and other labor taxes and subsidies. For the United States and other countries that measure earnings on an hours-paid basis, the figures are also adjusted in order to approximate compensation per hour worked. Hourly compensation costs are converted to U.S. dollars using the average daily exchange rate for the reference period. The exchange rates used are prevailing commercial market exchange rates as published by either the U.S. Federal Reserve Board or the International Monetary Fund. Earnings statistics are obtained from surveys of employment, hours, and earnings or from surveys or censuses of manufactures. These surveys typically cover firms with a minimum of one to ten employees. For most countries, adjustment factors are obtained from periodic labor cost surveys or censuses of manufacturers and interpolated or projected to non-survey years on the basis of other information. Generally, these surveys cover all employees in the establishment; survey data are used in both production worker and all employee series. Other information used includes tabulations of employer social security contribution rates provided by the International Social Security Association, information on contractual and legislated fringe benefit changes from labor bulletins, and statistical series on indirect labor costs. For the United States, the adjustment factors are specially constructed for international comparisons using data from several surveys. The methods used, as well as the results, differ somewhat from those for other BLS series on U.S. compensation costs. The statistics are also adjusted, where necessary, to account for major differences in worker coverage; differences in industrial classification systems; and changes over time in survey coverage, sample benchmarks, or frequency of surveys. Nevertheless, some differences remain. Exceptions to these methods, as well as data sources can be found in "Country Notes and Sources" located at www.bls.gov/fls. Series over time may be linked due to survey changes or changes in industrial classification: In many cases, data series used to estimate the hourly compensation figures are not available for the entire time period. Where appropriate, BLS attempts to link data series in order to construct estimates of compensation over the entire time period of the measures. Data for all manufacturing or more aggregated industries may be used to estimate some components of compensation: Some data needed for the hourly compensation measures may not be available at the sub-manufacturing level, or may only be available for groupings of industries. For example, trends in bonuses and sick pay are not available at the sub-manufacturing level for some countries. Where appropriate, BLS uses the manufacturing or more aggregated industry data to estimate levels or trends in component industries. PAGE 5 Data Limitations Because compensation is partly estimated, as described in the section on methods, the statistics should not be considered as precise measures of comparative compensation costs. In addition, the figures are subject to revision as the results of new labor cost surveys or other data used to estimate total compensation become available. The hourly compensation figures in U.S. dollars shown in the tables provide comparative measures of employer labor costs; they do not provide intercountry comparisons of the purchasing power of worker incomes. Prices of goods and services vary greatly among countries, and the commercial market exchange rates used to compare employer labor costs do not reliably indicate relative differences in prices. Purchasing power parities--that is, the number of foreign currency units required to buy goods and services equivalent to what can be purchased with one unit of U.S. or other base-country currency--must be used for meaningful international comparisons of the relative purchasing power of worker incomes. Total compensation converted to U.S. dollars at purchasing power parities would provide one measure for comparing relative real levels of labor income. It should be noted, however, that total compensation includes employer payments to funds for the benefit of workers in addition to payments made directly to workers. (For a few countries, the compensation measures also include taxes or subsidies on payrolls or employment even if they do not finance programs which directly benefit workers.) Payments into these funds provide either deferred income (for example, payments to retirement funds), a type of insurance (for example, payments to unemployment or health benefit funds), or current social benefits (for example, family allowances), and the relationship between employer payments and current or future worker benefits is indirect. On the other hand, excluding these payments would understate the total value of income derived from work because they substitute for worker savings or self-insurance to cover retirement, medical costs, etc. Total compensation, because it takes account of employer payments into funds for the benefit of workers, is a broader income concept than either total direct earnings or direct spendable earnings. An even broader concept would take account of all social benefits available to workers, including those financed out of general revenues as well as those financed through employment or payroll taxes. EXCHANGE RATES PAGE 6 Exchange Rates: National Currency Units per U.S. Dollar PAGE 7 ----------------------------------------------------------------------------------------------------- Country or Area 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 ----------------------------------------------------------------------------------------------------- United States........... 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Argentina............... .9997 .9995 .9995 .9995 .9995 .9995 3.063 2.901 2.923 2.904 3.054 Brazil.................. 1.005 1.078 1.161 1.821 1.830 2.353 2.921 3.075 2.926 2.435 2.174 Canada.................. 1.364 1.385 1.484 1.486 1.486 1.549 1.570 1.401 1.302 1.212 1.134 Mexico.................. 7.600 7.918 9.152 9.553 9.459 9.337 9.663 10.79 11.29 10.89 10.91 Australia............... 1.277 1.345 1.590 1.549 1.720 1.935 1.839 1.533 1.358 1.311 1.327 Israel.................. 3.192 3.449 3.800 4.140 4.077 4.206 4.738 4.554 4.482 4.488 4.457 Japan................... 108.8 121.1 131.0 113.7 107.8 121.6 125.2 115.9 108.2 110.1 116.3 Korea, Republic of...... 804.5 950.8 1400 1190 1131 1292 1250 1192 1145 1024 954.3 New Zealand............. 1.454 1.509 1.865 1.889 2.189 2.380 2.153 1.718 1.505 1.419 1.540 Philippines............. 26.13 29.47 40.89 39.09 44.19 50.99 51.60 54.20 56.04 55.09 51.25 Singapore............... 1.410 1.486 1.672 1.695 1.725 1.793 1.791 1.743 1.690 1.664 1.588 Taiwan.................. 27.47 28.78 33.55 32.32 31.26 33.82 34.54 34.41 33.37 32.13 32.51 Austria................. 10.59 12.21 12.38 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 Belgium................. 30.97 35.81 36.31 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 Czech Republic.......... 27.15 31.70 32.28 34.57 38.60 38.04 32.74 28.21 25.70 23.96 22.60 Denmark................. 5.800 6.609 6.703 6.990 8.095 8.332 7.886 6.577 5.989 5.995 5.942 Finland................. 4.595 5.196 5.347 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 France.................. 5.116 5.839 5.900 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 Germany................. 1.505 1.735 1.760 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 Hungary................. 152.6 186.8 214.4 237.1 282.2 286.5 257.9 224.3 202.7 199.6 210.4 Ireland................. .6252 .6595 .7019 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 Italy................... 1543 1704 1737 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 Netherlands............. 1.686 1.953 1.984 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 Norway.................. 6.459 7.086 7.552 7.807 8.813 8.996 7.984 7.080 6.740 6.441 6.410 Poland.................. .. 3.280 3.480 3.970 4.350 4.094 4.080 3.889 3.658 3.236 3.103 Portugal................ 154.3 175.4 180.3 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 Slovakia................ .. 33.62 35.23 41.36 46.04 48.36 45.33 36.77 32.26 31.02 29.61 Spain................... 126.7 146.5 149.4 .9387 1.083 1.117 1.058 .8833 .8040 .8033 .7960 Sweden.................. 6.708 7.645 7.952 8.274 9.174 10.34 9.720 8.080 7.348 7.471 7.372 Switzerland............. 1.236 1.451 1.451 1.505 1.690 1.689 1.557 1.345 1.243 1.246 1.253 United Kingdom.......... .6407 .6106 .6034 .6184 .6598 .6946 .6660 .6117 .5456 .5490 .5420 ----------------------------------------------------------------------------------------------------- See notes on the following page Exchange Rate Notes PAGE 8 On January 1, 1999, several European countries joined the European Monetary Union (EMU): Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. There are currently other member countries of the EMU that are not covered in this report. Currencies of EMU members were established at fixed conversion rates to the euro, the official currency of the EMU. For the EMU countries data on hourly compensation costs are reported in euros and exchange rates for the EMU countries relate to euros per dollar for 1999 to the present; for the years 1996-1998, hourly compensation data are published in the old national currencies used in each country before the adoption of the euro. National currency units are United States, dollar; Argentina, peso; Brazil, real; Canada, dollar; Mexico, peso; Australia, dollar; Israel, new shekel; Japan, yen; Republic of Korea, won; New Zealand, dollar; Philippines, peso; Singapore, dollar; Taiwan, dollar; Austria, euro; Belgium, euro; Czech Republic, koruna; Denmark, krone; Finland, euro; France, euro; Germany, euro; Hungary, forint; Ireland, euro; Italy, euro; Netherlands, euro; Norway, kroner; Poland, zloty; Portugal, euro; Slovakia, koruna; Spain, euro; Sweden, krona; Switzerland, franc; United Kingdom, pound.